LVMH shakes up leadership of Dior, Louis Vuitton

Dive Brief:

LVMH on Wednesday announced "significant organizational changes,” effective Feb. 1. Jewelry brands Tiffany, acquired two years ago for $16 billion, and Repossi have also joined the Watches & Jewelry Division, led by Stéphane Bianchi, per a company press release.
Christian Dior Couture chief Pietro Beccari will be CEO of Louis Vuitton, succeeding Michael Burke. After 10 years leading Louis Vuitton and more recently “guiding the successful integration of Tiffany,” Burke will have unspecified new responsibilities, reporting directly to CEO Bernard Arnault.
Delphine Arnault, who has supervised Louis Vuitton product since 2013, succeeds Beccari as Christian Dior Couture chairman and CEO. Charles Delapalme, who has led Dior’s commercial activities since 2018, will be managing director of Christian Dior Couture.

Dive Insight:

The highest end of luxury has escaped much of the fallout from macroeconmic pressures on the consumer. Nearly all luxury brands in the U.S. and Europe generated positive growth most of last year, according to recent research from Bain & Co. Globally, the luxury market may have wrapped up 2022 with growth of 21%, to reach 1.4 trillion euros ($1.5 trillion at press time).

But a few LVMH brands are somewhat vulnerable and face ebbing growth. The luxury conglomerate beat sales expectations in its third quarter last year, but HSBC analysts led by Erwan Rambourg in November predicted a level of slackening, especially at Louis Vuitton, but also at Dior.

“Overall, we are seeing signs that very high-end luxury is resilient (think Chanel), but we see reasons for some more mainstream price points (notably Louis Vuitton) to suffer in the short term,” Rambourg said in a client note. “Even Dior, a brand that has quadrupled sales over the past four years, according to our estimates, is likely to see sales starting to slow in the US and mainland China as there could be a period of normalization of growth.”

Those analysts also anticipated leadership changes along the lines of those announced Wednesday.

“It could be time also for some management changes at the helm of both [Louis Vuitton] and Dior as these two enter a new chapter and account for two-thirds of group EBIT,” they said.